Kroger comes under fire for use of electronic shelf labels | Grocery Dive

Two U.S. senators have raised concerns about the technology leading to price gouging and invading consumer privacy.

While ESLs allow grocers to practice dynamic pricing, they also take advantage of consumers at a time when income spent on food is at a 30-year high, Sens. Elizabeth Warren and Robert P. Casey, Jr. wrote in a letter to Kroger Chairman and CEO Rodney McMullen on Aug. 5.

The senators noted these devices introduce the potential for large grocery companies to “abuse their power and surge grocery prices suddenly” at times when specific products are most in demand. The widespread use of ESLs and dynamic pricing would also result in consumer goods being “priced like airline tickets,” Warren and Casey wrote, citing Marketplace.

Kroger refuted the consumer pricing concerns stating that it aims to lower prices over time for its consumers and that doing so leads to more revenue for the company.

Kroger’s ESL device, called Enhanced Display for Grocery Environment (EDGE) Shelf, also threatens consumer privacy, according to the senators. In partnership with Microsoft, Kroger plans to place cameras on its EDGE Shelf displays and use facial recognition to determine information about its shoppers, including gender and age, to push personalized offers and advertisements, per the letter.

The senators wrote that they are “concerned about whether Kroger and Microsoft are adequately protecting consumers’ data, and that as Kroger expands the personalized customer experience, customers will ultimately be offered a worse deal.”

Kroger’s emailed statement did not address the senators’ concerns about the alleged risk to consumer data privacy.

Warren and Casey have asked Kroger to answer more than 10 questions by Aug. 20 defending and explaining the use of ESL technology, including:

The letter comes as retailers ramp up adoption of ESLs. Walmart announced in June plans to install electronic shelf labels in 2,300 stores by 2026. Last month, Instacart said it will roll out its Carrot Tags’ pick-to-light functionality chainwide with Schnuck Markets.

This isn’t the first time grocers have faced concerns about whether their technology initiatives are putting consumers at a disadvantage. In late 2022, a coalition of consumer rights and public interest groups called on grocers to rethink digital-only deals, claiming they may violate the Federal Trade Commission Act and leave non-digital consumers overpaying at a time of high inflation.